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Federal Reserve Board of Governors

Protocol for the Cooperative Oversight Arrangement of CLS

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The Federal Reserve and other central banks have established a cooperative oversight arrangement for CLS, a foreign exchange settlement system. The Protocol for the Cooperative Oversight Arrangement of CLS (Protocol) provides a mechanism for the central banks of issue of currencies eligible for settlement in the CLS system to fulfill their responsibilities to promote safety, efficiency, and stability in the local markets and payment systems in which CLS participates. The Protocol is designed to facilitate comprehensive oversight of CLS, enhance oversight efficiency by minimizing potential burden on CLS and duplication of effort by the participating central banks, foster consistent and transparent central bank communications with CLS, enhance transparency among the participating central banks regarding the development and implication of international and domestic policies applicable to CLS, and support fully informed judgments when participating central banks make their oversight assessments and decisions regarding CLS. The Federal Reserve organizes and administers the CLS Oversight Committee, which is the primary forum for the participating central banks to carry out their cooperative oversight of CLS.

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Last update: September 2, 2009